Days after announcing debt investment, US investment firm Värde Partners will pick up around 15% equity stake with an investment of Rs 933 crore (around $117 million) in businessman Anil Ambani group’s debt-laden Reliance Power Ltd (RPL).
The RPL board on Thursday approved issuance of up to 60 crore equity shares and/or warrants convertible into equity shares at an Issue Price of Rs 15.55 per share and/or warrant, aggregating to Rs 933 crore to VFSI Holdings Pte. Limited, an affiliate of Varde Partners, as per a regulatory disclosure.
The shares will be issued through preferential allotment on a private placement basis, RPL said in the disclosure.
Few days ago, the two companies had signed an agreement where RPL would avail debt of up to Rs 1,200 crore ($150 million) from the US private equity investor.
In June last year, Värde Partners had invested Rs 550 crore in Reliance Infrastructure, part of the anil Ambani group firm.
The equity transaction in RPL came after market hours. Shares of RPL, listed on the Mumbai stock exchanges, had ended weaker by 1.62% to end trade on Thursday at Rs 21.30 apiece on the BSE.
RPL, part of the Reliance Group owned by the brother of tycoon Mukesh Ambani, was formed in 1995 and got listed in February 2008 after one of the biggest India initial public offerings (IPOs) that helped the firm raise Rs 11,560 crore.
RPL has one of the largest portfolios of power projects in the private sector, based on coal, gas, hydro and renewable energy, with an operating portfolio of 5,945 megawatts. However, the Reliance group has been struggling under a pile of debts leading to at least four of its companies being dragged to the bankruptcy process by its lenders.
For Värde Partners - a global investment firm focused on credit and distressed assets in India - while this is the second deal with the Reliance group firm, it has other investments including the recent debt investment in real estate developer Omaxe in April and KSK Mahanadi for Rs 1,622 crore, among the single largest distressed debt deals in India.
The US investor is among the three resolution applicants shortlisted to buy out two stressed Srei Group companies.
Founded in 1993, Värde Partners is among the active distressed asset investors in India. It manages a total portfolio of around $13 billion globally with offices in India, Singapore, Minneapolis, New York, London and few cities in Europe and Asia.
In India, it operates from its Mumbai office since 2018 and has also partnered with Aditya Birla Capital’s asset reconstruction company (ARC).